Muskegon and West Michigan Real Estate Knowledge base


Road maintenance agreements or RMA or private road

Road maintenance agreement problems

We had a sale ready to close accept that Fannie Mae required a agreement in written regarding maintaining a private road there was no maintenance agreement and the majority property owner refused to sign one. so our sale was going to die. This is what Jake  jochsner of  worked out . 

The problem was that in Spring Lake Township there was an ordinance that required maintenance agreements for private roads. The buyer’s lender then required an agreement to be able to follow through with financing. Because of this, we tried to put together an agreement and, unfortunately, ran into some uncooperative  neighbors

Thanks to the awesome lender, Jake Ochsner of Finance America in Grand Rapids, this problem was solved and the sale was recovered. 

what Jake did

 We looked up Michigan laws which state that private roads are regulated at the township level.  I called the community development director with Spring Lake Township and he was willing to write me a letter that confirms this road is not required to have a private road maintenance agreement since it was built prior to the township ordinance regulating private road maintenance agreements.  The UW accepted that J

Jake Ochsner From: Lukas Hill Sent: Monday, November 07, 2016 11:20 AM  Mr. Ochsner, Spring Lake Township has reviewed the subject private driveway and confirmed that it was put in place prior to the ordinance requiring maintenance agreements. Spring Lake Township will not, and cannot, for this agreement after the development has already occurred, therefore we view it as a legal nonconforming situation that may remain in perpetuity as is. Best, Lukas Lukas Hill, AICP Community Development Director Spring Lake Township 101 S. Buchanan Spring Lake, MI 49456 

A Road maintenance agreement, private road maintenance agreement is often entered into for roads that are are privately maintained, by the owners of the properties that use or benifit from the road. Road Maintenance Agreement is often a lender requirement when financing a propert or new home. So what is a private road, exactly? Here’s the Free Legal Dictionary definition: A private road is often established because an individual needs to gain access to land; such a road can cross another person’s property. A private road can be used by the general public and is open to all who wish to use it, but it primarily benefits those at whose request it was established. Unlike highways that are cared for by the public at large, private roads are maintained at the expense of the private individuals who requested the road. so if you live on a private road you should expect to partisapate in the road maintence.

 FHA loans require them most of the time.  Fannie Mae’s current requirements in a nutshell: If the property is located on a community-owned or privately owned and maintained street, Fannie Mae will now an adequate, legally enforceable agreement or covenant for maintenance of the street. The agreement or covenant should include the following provisions and be recorded in the land records of the appropriate jurisdiction: Responsibility for payment of repairs, including each party’s representative share.   Default remedies in the event a party to the agreement or covenant fails to comply with his or her obligations and The effective term of the agreement or covenant which in most cases should be perpetual and binding on any future owners.   

So what will you need?

The appraiser will typically be looking for two big things: A legally recorded easement regarding right-of-way from property to public roadway A private road agreement that provides for continued maintenance and is signed by everyone who lives on the road

Fannie Mae Private Road Maintenance Agreement must be recorded on the land records for the municipality that the property is located in, and must contain the following: Each homeowners responsibility for the road and monetary share of repairs and maintenance. A remedy in case of default, or failure to comply by one of the homeowners The effective term of the agreement.  In most agreements the term is perpetual and binding on all future owners. an adequate legally enforceable agreement or covenant for maintenance of the street is required. The agreement should include the following and be recording in the land records of the appropriate jurisdiction: • Who is responsible for payment of repairs, including each party’s representative share of the expense • What are the default remedies in the event a party fails to comply with their payment obligations • How long the agreement will be in effect (should be perpetual and binding on future owners) • If the State has statutory provisions that already define the responsibility of property owners, then no separate agreement is required. (Resource: Fannie b4-1.3-04 Site Section of Appraisal Report)



FHA Private roads or streets are acceptable to FHA, provided each property has vehicular or pedestrian access. If the property is not provided with an all-weather surface, the absence of such must be noted on the appraisal. An all-weather surface is a road surface over which emergency and typical passenger vehicles for the area can pass in all types of weather. Private streets must be protected by permanent recorded easement (non-exclusive and non-revocable easement without trespass from the property to a public street) or the streets must be owned and maintained by a homeowners association (HOA). Shared driveways must also meet these requirements. The recorded easement must be reviewed and approved by the Direct Endorsement Underwriter and documented in the Lender's file at the time the loan is submitted for mortgage insurance. Evidence of a road maintenance agreement is not required. (Reference: FHA Handbook 4150.2, 3-6.A.7)

VA Each property must be provided with a safe and adequate pedestrian or vehicular access from a public or private street. Private streets must be: • Protected by a permanent easement, and • Maintained by a homeowners association or joint maintenance agreement All streets must have an all-weather surface. Also for VA: This item is listed on every Notice of Value and must be checked if applicable to the subject property to inform the Veteran of requirements: (Reference: VA 12.05, ACCESS TO PROPERTY (7/1/2000)


USDA PRIVATE ROAD/COMMON-USE DRIVEWAY. Evidence that use of the private road or common-use driveway is protected by a recorded permanent easement or recorded right-of-way from the property to a public road, and that a provision exists for its continued maintenance. USDA RD does not require a private road maintenance agreement rule. “Private streets must have a permanently recorded easement or be owned and maintained by a Home Owners Association (HOA).” (Reference: USDA Handbook-3555 Chapter 12, 12.7

Freddie Mac Freddie Mac does not require a separate maintenance agreement. However, the property must have “legally” appropriate ingress and egress (meaning that if it’s a private street/road, there is a recorded easement describing the road and where it’s located). • Must be maintained in a manner that generally meets community standards • Comparable sales should have street maintenance similar to the subject property • If not similar, adjustments must be made with an explanation of the differences • Appraiser must also comment on the “marketability” of the property. (Resource: Freddie 44.15: Property description and analysis)




For example, if you’re buying a home close to the public road, you may be able to take responsibility for the portion of the private road from your property to the public right-of-way and treat it as a driveway or maybe having the agreement signed by the majority of the home owners.

David Medendorp CCIM, GRI, CRS

ALT Realtors and Property management





Comment balloon 0 commentsDavid John Medendorp • November 02 2016 10:57AM
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